Middle Market Mergers and Acquisitions

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Category Archives: Transaction Mechanics

Selling your business? Eventually during the M&A process, the moment of truth will come and your advisor will ask the potential buyers to provide formal letters of intent (“LOIs”). While letters of intent can take many forms, it is important to understand what they are and what they aren’t.
Most importantly, LOIs are generally not binding on the buyer. Typically, the only binding part of the LOI is that you will be agreeing to a period of time where the buyer has the exclusive right Read More [...]

Are you ready to sell your business? OK! But before you cash out, you’ll need to find potential buyers. Middle market companies should generally be marketed to two broad groups of potential buyers: financial buyers and strategic buyers.
Know your targets
Financial buyers tend to be professional investors that don’t have deep operational experience. These buyers, mostly private equity firms, family offices, and the like, tend to seek companies that have existing management teams that Read More [...]

For those of us in the merger and acquisition or “deal” business, buying and selling companies is second nature. We live through transaction after transaction, buying and selling companies as routinely as middle market businesses provide their own products or services.
But, in most cases, the people involved in the middle market companies we buy and sell go through the merger and acquisition process only one time. Most entrepreneurs and business owners don’t know what to expect from a sale Read More [...]

I was recently interviewed on MSNBC's Your Business with JJ Ramberg.
They were nice enough to have me on the show to talk about the things you need to do to start planning for the sale of your business.
The key bullet points:
1. Invest in people and processes
2. Focus on what you do best, outsource the rest
3. Create recurring revenue streams
4. Get your house in order
Watch the rest here:
https://www.youtube.com/watch?v=pY5eAi9LZLE Read More [...]

I was recently asked to record a podcast on planning for the sale of your business with Andy Asher of bloomerboomer.com. The host asked me to discuss ways to best prepare for a sale of your company and to get the highest value from a potential transaction.
You can listen to the podcast here:
Much of the content is based on my recent article for the same website: 5 Things to Consider if You Plan to Retire From and Sell Your Business in 5 Years. Read More [...]

Last week, Middle Market Executive published the most recent article in my series on the "Inner Workings of a Deal." In this article, I explored the decision to hire an intermediary.
The article looks at three areas:
1. Should you hire an intermediary? While plenty of deals get done without an intermediary, business sale transactions are difficult to complete. There are a variety of pitfalls and stumbling blocks to getting a deal over the finish line, and deals can take huge amounts Read More [...]

Last week, Forbes published my article on "The 'Buy and Build' Strategy - Spotlight On A Modern Day Private Equity Trend."
One aspect of these strategies that I didn't mention in the article is the size and capabilities of the companies that are used as the platforms and as the add-ons.
Generally speaking, private equity investors need to be able to scale investments quickly in order to make a Buy and Build strategy work. Consequently, the platform company needs to have management and infrastructure Read More [...]

Selling a company requires the same level of planning that any other business activity requires. With advance planning, you'll be able to significantly increase the post-tax value of a transaction. Surprisingly, many of my clients don't start the planning cycle until it is too late.
Last week, Middle Market Executive published the second in my series on the Inner Workings of a Deal, entitled "Preparing for a Deal: What to Expect When You're Expecting."
While my full advice can be seen in Read More [...]

I am working with Middle Market Executive to publish a new monthly series entitled "The Inner Workings of a Deal: Tips for a Successful Transaction."
As the title suggests, I will over the course of nine articles go through the planning and execution of a middle market transaction, and provide ideas on how to think through your goals, and help form expectations for your "deal."
This month, the series launches with a discussion of the sorts of "deals" that are common in the middle market, Read More [...]

Handling working capital in a transaction is an issue that is often difficult for sellers of middle market companies to come to grips with. While grossly oversimplified, in most cases, the practical definition of working capital for transactional purposes usually means the amount of the company's accounts receivable less the amount of the company's accounts payable. (Other items can be important from company to company including inventory, accrued compensation, and other amounts, but in most Read More [...]